Oliver buys only lager and kebabs. a. In 2009, Oliver earns 100, lager is priced at 2

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Oliver buys only lager and kebabs.

a. In 2009, Oliver earns €100, lager is priced at €2 a litre and kebabs are priced at €4 each. Draw Oliver’s budget constraint.

b. Now suppose that all prices increase by 10 per cent in 2010 and that Oliver’s salary increases by 10 per cent as well. Draw Oliver’s new budget constraint.

How would Oliver’s optimal combination of lager and kebabs in 2010 compare to his optimal combination in 2009?

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Economics

ISBN: 124344

2nd Edition

Authors: N. Gregory Mankiw

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Question Posted: Nov 02, 2024 07:00 AM

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Oliver buys only lager and kebabs. a. In 2009, Oliver earns 100, lager is priced at 2

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Economics

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